Environmental problems with unknown emission abatement cost and damage are analyzed. The game under consideration is static, and its expected payoff structure displays a prisoners’ dilemma. Even in this most unfavorable setting cooperation might arise if the involved countries are sufficiently...

This paper models global environmental policy in a stochastic setting: reducing pollution not only reduces expected environmental damage but also its spread. The national incentives to cooperate are analysed under adverse conditions: expected payoffs are taken to have the structure of a (static)...

This paper models global environmental policy in a stochastic setting: reducing pollution not only reduces expected environmental damage but also its spread. The national incentives to cooperate are analysed under adverse conditions: expected payoffs are taken to have the structure of a (static)...

To limit global environmental risks, countries must cooperate. However, the prisoners' dilemma-type of the problem suggests that international environmental agreements are difficult to obtain and to maintain. In this paper, the role of countries' risk preferences for the prisoners'...